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Markets are never 100% fair, or 0% fair. So instead of focusing on perfection, we should be focusing on improvement. An obvious way to have made the market more fair in this case would have been to make the announcement after the markets were closed for the day. Another possibility would have been to halt trading for a few minutes before and after the announcement, for the news to settle. I suspect that the person responsible for making the decision to announce in the middle of the trading day was also someone who, directly or indirectly, benefited from the cheating. Cui bono?

Far more likely, some group created a series of methods for intercepting internal communications (NSA) and passed this information onto another group (CIA) with deep links with major contracting firms (the whole global military industrial complex and it's financiers). Insiders risk getting caught and actually being punished where as, thanks to a whole range political communications interceptions, the other groups will blatantly commit crimes with no fear of prosecution.

Or better, not have a federal reserve bank controlling monetary policies and creating endless inflation at the cost of the wealth of the middle and lower class.

I love a good conspiracy theory, but this Tea Party nonsense is just stupid. First, inflation hurts the wealthy (who tend to be creditors) far more than it hurts the poor (who tend to be debtors). Traditional champions of the poor, such as Williams Jennings Bryan [wikipedia.org], understood this, and fought against tight money policies that actually benefit the wealthy and hurt the poor, but that is exactly the opposite of what is happening today. Second, both interest rates and inflation have been near zero for years, so your assertion that they are inversely correlated is weak. Third, what do you suggest as an alternative to our current monetary policy? European style austerity? Several years ago America and Europe both had about 10% unemployment. Today, America is at 7.5% and Europe is near 12%... and the euro has fallen against the dollar (again, the opposite of what your conspiracy theory predicts).

They probably couldn't count to 7 and figured no one would notice; I bet no one would know about any of this if they'd waited 2 or 3 more milliseconds. The less of a lead time, the less time others have to react, and the less time your assets spend locked up waiting.

Did they really? The information was, at the time the trade was executed, already announced and public. I do believe that, if a person has insider information, the restriction on them is that they cannot use it until it becomes public information.

So maybe they broke the law in how they got the information, but by waiting until its public to execute the trade, they seem to have, in actuality, complied with at least a lay understanding of the relevant regulations. My own company sends out reminders at various times to be wary of making statements because of worries about insider leaks, but as far as any training I have ever had to take has said, once the information is public, trading based on it is fair game.

So how about this.... trader came about insider information, knew when it was to be announced, and timed his trade for as soon as possible after the announcement in an attempt to profit while still being in compliance?Does the law/regulation take into account information travel time from the point of announcement in determining the order of events?

Not saying its wrong to, clearly its right by any understanding of physics that I have, but, isn't expecting people to understand such nuances a bit unrealistic?

If (and only if) the trade occurred before the light-travel time from Washington, then (by special relativity) there exists a reference frame in which the trade occurred before the information was released in Washington.

Not in Chicago. Chicago was not in the light cone of the information release at the time that the trades were executed and hence, the information wasn't public. I must admit to being a bit surprised that there is a non empty intersection of relativity and finance law.

But if they had waited those few more milliseconds, they would have been in compliance and yet still most likely beating anyone who had to process the Fed announcement first.

"This is an interesting situation where the speed of light may factor into the legality of their action."

I don't see what's "interesting" about it. They broke the law. Physics proves it pretty clearly.

Washington to Chicago is 596 miles via a great circle, however the Earth's curvature will reduce that, but only by about a mile.Light travels at 186 miles per second, thats 3.2ms

In the case of antipodes, you certainly see the effectAuckland to Malaga, 12392 miles (67ms) as the great circle goes, but dig a hole through the earth and you can do it in under 8,000 miles (42.5ms)

Physicists will claim that an event occuring at 1400UTC in Auckland will not have occurred until 1400+42.5ms in Malaga, however there's no way for anyone in malaga to receive data until +67ms at the earliest. If I executed the trades at +50ms, technically it's happened. At +40ms, we have arguments about whether it's happened or not (an impartial observer who is equidistant from both points will agree that the rate changed, then my trade was executed). Even at -40ms there's no way for me to impact the event.

However on a more practical scale, as we can't encode data in neutrino bursts, the only way for a trade at +60ms in Malaga would be to have pre-knowledge of what happens in Aukland. But from a physics point of view, you could theoretically know.

So you've got the following key points

135959+933ms last time I can practically* do something in malaga to affect the auckland release135959+957.5ms last time I can do something in malaga to affect the auckland release140000+0 event occurs in Auckland140000+42.5ms theoretically I could know about it140000+67ms I could know about it

"Washington to Chicago is 596 miles via a great circle, however the Earth's curvature will reduce that, but only by about a mile.
Light travels at 186 miles per second, thats 3.2ms"

Wrong in several respects.

(A) Curvature doesn't reduce the distance. Communications lines are on the surface.

(B) As someone else mentioned, it's 180,000mps.

(C) Electricity does not travel as fast in wires as light does in a vacuum. In a coax cable, it's only about 2/3 the speed of light. And even if it were fiber, not wires, you then have the speed of the circuits that do the conversion and switching... still adding significant delay. So you can't use light speed as a measure, unless you're trying to establish a ridiculously unachievable lower bound.

"In the case of antipodes, you certainly see the effect
Auckland to Malaga, 12392 miles (67ms) as the great circle goes, but dig a hole through the earth and you can do it in under 8,000 miles (42.5ms)"

As already mentioned, this is a specious argument, since the communications are not traveling in a straight line, but on the surface.

At 596 miles, the speed of light is indeed 3.2ms. Add in switching delays, etc. and you get closer to 5ms, and that's assuming fiber.

But ALL of this is really beside the point. The knowledge that they were going to do it was presumably public. And even if not, and it was "insider" knowledge, it's still beside the point. Because they traded too early. 7ms advantage today is a significant advantage for HST.

It's not that interesting. They can be committing "insider trading" even if they'd waited until after the information had arrived, because they'd still have had an unfair time to decide what to do with it. As others have pointed out, in this case someone probably prepared an order plan ahead of time, and sent it off just ahead of everyone else. Even today's computers still take some time to process the incoming data.

Because then they would get busted for insider trading. This guy set his timers so that he wasn't doing the trade until after it was officially announced, but forgot about the speed of light delay and got busted anyway. Not that the FTC gives a damn about insider trading anyway, it's hilariously and blatantly rampant but they're powerless to do anything about it.

More likely, whoever set this up was an investment banker and didn't understand that the delay caused by the time it took the signal to get from DC to Chicago was enough to be measured. It's obvious to people like us, but then again, we've made the effort to learn science, and all investment bankers are interested in knowing about is manipulating money.

This type of insider trading is illegal.The leak that allowed this is a firing offense and also illegal.Trades were executed in Chicago after the change was announced in Washington D.C. in a classical physics sense.Trades were executed in Chicago before the change was announced in Washington D.C. in a relativistic physics sense.

What does all that imply?Someone at the Federal Reserve leaked the information before it was announced.Someone else wanted to use this information but also not get caught.That someone doesn't understand relativistic physics.

...But it happened in Chicago.... The boss says nothing happened, so nothing happened. I know that analyst said something happened, but he's an idiot. Look how dumb he is now! He's trying to swim with concrete shoes! You're not that dumb, are you?

Trades were executed in Chicago before the change was announced in Washington D.C. in a relativistic physics sense.

Actually, in relativistic physics sense, the trades in Chicago where outside of the light cone of the Washington event (neither in the future cone nor in the past cone). That being said, since Washington and Chicago do not move at relativistic speed with respect to each other, the trades are still at a later time than the announce, even if there's no possible causality.

This is I think part of it. If someone knew... 15 minutes in advance, they could have places a series of bets that looked like well, bets.

Knowing a small number milliseconds in advance is a very very odd thing (in this case 4-5). It's possible someone knew very well in advance, and was able to try and program the trades to beat everyone by a small number of milliseconds and hoped no one would notice, and that seems the most likely case.

Any other scenario creates a lot of very tricky technical problems whi

Someone had the order all queued up, and was waiting for word. He got word of the interest rate move, and keyed in his order, which his computer would execute at 2:00:00:002, forgetting that such an order was impossible without giving away he was cheating by having gotten the announcement early.

Longer version of the story is this
The fed announces the decision at 2 pm (EST). But press people are taken to a safe room ten minutes in advance and told the contents of the Fed release. They have 10 minutes to prepare their brief. Them and the editors are banned from communicating this to the outside world before 2pm.
Probably what happened is that a press guy communicated the announcement with his editor with the understanding that the news will not be released until 2pm. The editor probably spread the news to multiple locations, again with the 2pm restriction. The editor held his side of the agreement, and released it at 2pm (EST) in Chicago.
The news was legally released at 2pm, but just location shifted. They probably did not break the letter of the agreement. Of course, the slobs on Wall Street got creamed, if they were hoping that they could trade faster than Chicago by a millisecond.
This is one rare case in real life where the agreement should have used the relativistic definition of time-space and have the agreement describe the time co-ords for release for each location. But then, since New York is closer to DC than Chicago (an Philly even more so), it would be advantaging some locations more than others.

"Inside a room on the top floor of the William McChesney Martin, Jr. building, Fed officials instructed reporters not to send information about that decision to the outside world before precisely 2 p.m. as measured by the national atomic clock in Colorado.

The doors were locked at 1:45 p.m., and Fed staffers handed out copies of the statement at 1:50 p.m., allowing reporters a few minutes to digest the complicated document before reporting on its contents. At 1:58 p.m. television reporters were escorted out of the room to a balcony where cameras had been prepositioned. The Fed's security rules dictated that television reporters were not allowed to speak before precisely 2 p.m. Print reporters were told they were allowed to open a phone line to their editors at headquarters offices a few moments in advance of the hour, but not allowed to interact with people on the other end of the line until exactly two p.m."

So many hacked communications channels are still possible from this. The print writers can signal the editors when making phone calls before 2pm, without talking to them. For example, the editor can instruct the reporter to call them on landline if it's a sell, or his mobile number if it's a buy. The TV reporter can wear a jacket if it's a sell, or remove it if it's a buy, so someone across the building can monitor the balcony for pre-release signals... etc.

Also, from the http://www.nanex.net/aqck2/4436.html [nanex.net]:"It wasn't just gold. It was everything that traded. In fact, the 1/100th of a second after 2pm was the most active 10 milliseconds in the history of the U.S. Stock an Futures markets."

This was a major, major hack, and they waited as late as they could wait, without signaling their competitors.

This. To give a few more details as to what the article says though. Basically, even assuming they have some genius computer that can parse the announcement made at 2pm and execute these trades within 1 millisecond or less, it would be physically impossible for the news to have been received that quickly. The trades in Chicago were executed 2ms after 2PM. The speed of light dictates that the news (assuming no barriers or other latency) would take at least 7ms to actually reach Chicago from where it was announced.

So, in summary, no matter what these crooks try to say to fool a jury with favorable circumstances, it is physically impossible that they did not know about this news before 2PM

...that if the timing is down to milliseconds then the system is broken. It's automatically an unfair playing field tipped towards the largest competitors that have the computing power and programing to operate on that time scale.

Of course nothing about Wall Street is about fairness anymore and usually they don't care about the law, either.

Also, keep in mind that they produce nothing except destabilizing factors to the economy. High time to make long-term stock investments the only option. Randomized delay in the minute ranges for trades, no way to cancel trades, significant transaction tax.

Just put a small, fraction of a penny, fee on every trade executed. It won't even be noticed by people using the market for its intended purpose; long term bets on a company's quality. It would stop the high frequency trading nonsense since that relies on, of course, high speed trades and the fact that an essentially unlimited number of trade orders can be made.

Information was leaked and the whole thing setup to look somewhat legitimate. 3ms is the absolute fastest anything can get from Washington to Chicago, so the information was there before the official announcement.

Several large orders betting the other way may have been placed a few milliseconds after 2:00 PM as well. But there is a 'feature' in on-line trading that allows high frequency traders to cancel or abort trades that they claim were made as a result of 'system errors'.

It would seem foolish to trade within milliseconds of 2pm without knowledge of the Fed decision, since the other party could be in DC and in legitimate possession of the information. So it is surprising that the criminal got a counterparty to accept the trade. This trick will probably only work once. There was a time when this sort of information was released after the close of markets.

Actually a neutrino beam could make the trip faster than photons can in practice. One, because neutrinos could travel through the crust of the earth and thus avoid having to go around the curvature. Two, they would be traveling much closer to the speed of light than the photon-based signal, because that signal will be slowed by the index of refraction of the medium in which it travels, be it fiber optic cable or air (for radio waves).

If people knew half the shit that Wall Street does they wouldn't like it. I think articles like this actually make it harder to have a productive conversation about the fairness of Wall Street because it makes it seem like this type of abuse is the exception rather than the norm.

There is a revolving door between Wall Street, Corporate board rooms, and the Fed. Not only do people go through that revolving door but so does information, so does hits about what might happen in the markets or what might come out of the Fed. Go watch Wall Street, either one, it's dramatic but its accurate enough for the average person to get a idea of what goes on behind those closed doors.

It sounds as if news services could have released it at exactly 2pm in Chicago without breaking the Fed's rules. The rules say "public use."

I often work with material under a press embargo. If I get something on Tuesday with an embargo of 2pm EST Wednesday, that means I can send it to my editor in Chicago (or anywhere else) on Tuesday. That's not public use. My editor will wait until 2pm EST and release it (for public use) at that time in Chicago.

A key question is whether or not any organization transmitted information out of the lockup room and into its own computer system before 2 p.m. If that was done, the data could have been moved to computer servers near Chicago before 2 p.m. and publicly released the information from there at precisely 2 p.m. – enabling subscribers of that data service to get the information milliseconds before others in Chicago relying on transmissions from the Federal Reserve in Washington to arrive.

It is not clear whether that would violate the Fed's rules. The Federal Reserve declined to tell CNBC whether or not it would be a violation of their rules to transmit information out of the lockup room before 2 p.m., if that information was pre-loaded into servers in Chicago for release at 2 p.m....

On top of those precautions, every media person entering the lockup – including two employees of CNBC -- was required to sign an agreement that read: "I understand that I may make no public use of the documents distributed by Federal Reserve Board (FRB) staff or the information contained therein, including broadcasting, posting on the Internet or other dissemination, until the time the FRB has set for their public release." [my emphasis]

Transmitting them to the news service's own computer system in Chicago isn't "public use."

"No public use" means you can transmit your story to your editor in Chicago, who holds it until 2:00:00 pm EST and releases it immediately in Chicago.

That would be an unusual news story. It would consist of 1 machine-readable bit meaning "buy." But that's all their readers need.

As someone who makes a good part of my living trading bonds, there's a lot of misinformation here.

1) There is no such thing as "insider trading" in treasury bonds or their futures (or commodities futures or foreign exchange or options on any of the above). The reasoning is that the majority of the participants in those markets are knowledgeable insiders. Corporate bonds are a grey area but no one has ever been prosecuted and numerous people have openly traded on insider info. The SEC brought one case related to trading on credit default swaps, but it didn't go anywhere. Insider trading on stocks and stock options is illegal by case law.

2) if you had information about the Fed's future rate policy, you could make you bet in the spot or futures markets well ahead of the announcement. You would get a better price on your bet by doing so assuming it was a large bet, because markets tend to thin out before announcements (for technical reasons irrelevant to this discussion - just know it happens reliably).

I would guess the most likely explanation here, as with most apparent violations of the speed of light, is poor clock synchronization or other measurement issues.

Indeed, if it's criminal, it'll be wire fraud... and that's the big IF here, since I don't know whether the Fed's embargoes are criminal to breach... But if a reporter releases embargoed information before the agreed time, and you as a trader should know that the information is embargoed (you did get a license, right?), by trading ahead of release you and the reporter have likely engaged in a conspiracy to commit wire-fraud, which is actually a much easier deal to prove than insider trading.

Well I will take a crack at it....you see the problem is the current system is designed to allow the parasites, those that have made insane amounts of money by rigging and manipulating the government and the system to keep their elite status by being able to pull shit like this which ordinary folks can't do because they don't have the capital required to "buy in" at the correct facilities to beat the wire.

When i see shit like this, along with both parties seeming not to give a shit about being scene outright kicking the poor when they are down i have to wonder....how much time does the USA really have left? After all as has been pointed out several times the unemployment numbers are bullshit and if you figure in all those that they just magically drop from the rolls we are looking at a good 23%+ unemployment, meanwhile you have the right wing being so damned vicious to the poor you might as well replace the elephant with Monty Burns and then to add the shit icing on the asshole cake you have shit like this which allows the really nasty leeches like Goldman Sachs to make mountains of money off of the American people.

So I have to wonder if this isn't the root cause of why all empires fall, those at the top become so fucking greedy that they tilt the system so damned far out of balance the whole thing collapses. It pretty obvious that in the last 4-5 years or so many in power have stopped caring about the kayfabe of giving a fuck about anyone but the elite, the working poor and unemployed, which outnumber the top 1% by a good 10,000 to 1 (because in reality its more like 0.01% that get a good 70% of the wealth consistently) are just being bombarded with story after story like this where the elite scam billions and the only thing the government does is ask if they want a task break, and the war on poverty by attacking food stamps, medicaid/care, disability, welfare, etc makes it real clear to the poor folks that the elite really want them gone...so is this how it ends? With the poor getting everything taken away until their is nothing to lose and we have own own Arab Spring?

I don't know but I can tell you the flyover states are beginning to look like the depression, small businesses that were here for generations closed and the factories gone so that huge chunks of land are nothing but abandoned buildings, and instead of helping the broke and starving poor those in government seem to be doing everything they can to curbstomp poor folks and take away any benefits they may get. Hell I got a disabled relative that if he isn't able to win against them taking his disability he'll be homeless by Xmas, and I hear similar stories from all my customers, women and kids sleeping in cars because they found a way to take away what pitiful benefits they were getting, tents popping up all over the place because folks got nowhere to live, it makes me wonder if the whole French "let 'em eat cake" situation is repeating here and will end with the same result. The teeming poor have nothing to lose and their ranks grow by the day, its seriously bad here folks.

Sure it's plausible. Atomic clocks. What the exploiter did was try to time the leak so that it happened exactly after the fed announced its decision before anyone else had a chance to react on it. They performed the trades at exactly 2:00 so that it all looked kosher. The problem was that they did it faster than what is physically possible and thus what was a plan to give plausible deniability backfired and thus exposed that they had insider knowledge.

Apparently the great minds of the Masters of the Universe aren't familiar with the speed of light. No matter for them though - the head of any major financial institution could rob the president at gunpoint on live TV, and still not be prosecuted for it.

Does it even make sense to discuss this in terms of ms? Once the Fed decision was announced, someone had to read or listen to it, digest it, and then make a decision. A purely non-thinking reflex in humans is measured in the order of 100 ms-- e.g. light goes on, push a button, no thought involved. Is someone trying to suggest that if the press release was given at 2:00:00 in a machine readable format, a computer parsed the information (it presumably was not given as a buy or sell recommendation) and made a decision to trade without human interaction/vention, it would have been kosher?

Even if this was 100ms after 2pm, this was almost certainly a criminal act. I think a human making a decision involving billions of dollars would probably like to take a second or two to make sure they weren't misinterpreting the press release before investing even if they were in a hurry.

Is someone trying to suggest that if the press release was given at 2:00:00 in a machine readable format, a computer parsed the information... and made a decision to trade without human interaction/vention, it would have been kosher?

Ummm, what? That's exactly how most trades originate.

Here: [bloomberg.com]
"Today, when Bloomberg releases
a market-moving headline, on
average it takes 4 seconds for
the markets to move after the
news story hits. Bloomberg
machine-readable news can help
you get ahead of that window.... Bloomberg's Event-Driven Trading feed offers clients instant, machine-readable delivery of Bloomberg's world-class
news and data, including breaking headlines, exclusive worldwide market-moving coverage, structured financial data
from company releases, news analytics, and global economic data."

Trying to compete with these guys by websurfing is really no different than reading the evening paper.

Well, here's a recent article [businessweek.com] that says the percentage of trades that are automated has been falling and may only be slight majority now.

These sort of announcements are generally written by computer, sent by computer, received by computer (over quite expensive lines), parsed by computer, and acted on by algo trading, generally in less than 1 ms these days. There's a whole industry around it. (Or should I be expecting a Whooshing sound any minute now?)

I suspect the answer is: the "Chicago Exchanges" have nodes on the low-latency Wall Street network.

you do realize that 50% of all current trades last less than 100ms right? That is right folks 50% of the current volume is nothing but hot air. that is why the stock market has had 10-15% growth but the economy is barely doing 1-2%.

The fact this happened shouldn't surprise anyone. this is the problem of HFT.

Well, yes, yes it would. Did the fed time their release for exactly 2:00 and slave their clocks to the naval observatory (as many modern computer systems do)? Does the financial community know this? The financial community has hyper-accurate knowledge of timing in their own systems as well as exactly how many milliseconds it takes to complete a trade.

Suppose you have information leaked an hour ahead of time. You can't act on it then because it'd be obvious that you had leaked information and you know they're looking for that. So, you have to wait until everybody else has it. But if you wait until everybody else starts to react to the news, your leaked information is worthless.

You also only have an hour to think about what to do, so you can't change your IT system and whatever plan you come up with you have to either act immediately or not. So, you tell your existing IT system that is already capable of hyper-accurate timing to execute a trade just after the announcement.

Later on you realize that everybody has hyper-accurate timing, not just you.

Seriously, I've been contacted by maybe a dozen financial company recruiters who want me to squeeze another quarter millisecond out of their trading network. I'd sooner flip burgers. Millisecond trading is theft. Period. Even when it happens enough milliseconds after receiving information to have broken no law.

No leak would allow someone to time those trades so precisely. there may have been a leak, but there was also something done to make it possible.

Oh come on.You know what the fed is going to do in advance. (whispers and leaks)You know it will be done precisely on time so as to avoid all appearances of favoritism.You arrange for your trades to appear after the precise time of release, but fail to take into account the time for the announcement to get to Chicago.

Your trades go in after the announcement but before the notice arrived in Chicago.

A leak is the most obvious answer. A leak of several hours notice makes more sense.

The executive branch nominates the Fed president but that person doesn't report to the POTUS.

My guess is that someone with an inside connection to the Fed leaked the information (over cocktails or a golf outing the day before) to one of their hedge fund buddies who made the billion dollar bets. They jumped the gun because they figured that John Q. Public isn't going to believe that trades made a few thousandths of a second too early can really be that big of a deal. Even if they get caught and wind up paying a fine, they will still make out like bandits. Tax these millisecond trades and they'd go away or, at least, the volume would drop significantly. Instead of the paltry fines that the SEC levies on the cheaters, they ought to take the entire transaction away from the guilty party. That'd stop the practice. In a heartbeat. Third strike and you go directly to jail.

I don't think you understand what these trades were. By "Tax these millisecond trades..." I am assuming you are referring to the proposals of adding a small transnational tax to every trade. These proposals aim to cut down on high frequency trading where lots of trades are made very quickly (squeezing in between other trades and eking out small amounts of profit).

This wasn't high frequency trading, this was a big trade, made intentionally to take advantage of a presumed market movement, and whoever made the trade would still have made it if there were a tiny transnational tax on top of it. This wasn't some computer constantly submitting prices and making hyperfast trades, it was probably a trading decision made by a real live human--it just happened to be very time dependent and was scheduled with millisecond accuracy (maybe too much accuracy if the story is correct).

A per-transaction tax would do absolutely nothing about a trade made based on information acquired over golf (which would already be illegal).

Or alternatively to a tax, introduce a random delay on the order of 1 to 5 seconds to each order. That way, a ms advantage will be lost in the "sea" of 5 seconds. And for those who say that ms level trading provides important liquidity to the market, I say that if 5 seconds makes such a big difference, to a trade, it is cheating or at best gaming the system rather than investing. And investing is in my humble opinion the true value and purpose of the stock market.

Can someone explain this to me in idiot? I don't see what the problem is, nor why I should care.

FTFA

There would seem to be three possibilities: 1) Some trader was extraordinarily lucky, placing a massive bet just before a major announcement that would make that bet highly profitable. 2) There was a leak, either by a media organization with early access to the data or even someone at the Fed. Or 3) The laws of physics have been violated as the information traveled from Washington to Chicago faster than the speed of light.

Another possibility is that it was a big player like Buffet or Sachs, counting on profiting one of two ways: a) precede the market b) bet wrong but cause the market to reverse, triggering massive losses to those who told their broker to trade according to the news, with a stop-loss protection.

To carry out B, you have to be able to place a second bid greater in magnitude but opposite sign to the first, about ten minutes after the news breaks. You also have the liquid assets to do it. since the bailouts doubled the national debt and gave it to banks in interest free loans with no set date of repayment, then yes, itmay be possible that investment banks did it.

What if there was a guy named Beeks that had the report in his briefcase and traveled to the exchange in advance of the public announcement, and there were 2 men and a woman that intercepted the report and used it to their advantage while swapping it with a fake report which was given to the original people?

Of course, this hack isn't even new. There's the value of delaying a radio broadcast was documented in the movie The Sting. And before that there was the Count of Monte Christo who did a man in the middle injection of fake tweets into France's Semaphore packet system to ruin a banker.

I would assert that High frequency trading is simply parasitic. Many people have suggested a transaction tax could fix this. It would damp the frivolous trades yes, but it would not fix these mega scale singleton trades that can happen like this.

my proposal: What one should do I think is fix this by injecting random delays into the trading system itself. That is you would queue up all trades for the last 100 milliseconds into a block. Then randomize their order. then execute the trades in that new order. This would erase any value of a trade that depended on beating another trade by a few millisconds. You'd still have some edge cases to worry about (i.e. racing to be in the block before the next block). But you could fix that too (dither the interval size between 80 and 120 milliseconds at random, so no one would know where the block boundaries were.

For this to be viable enough people would have to agree that HF trades have no actual value added. Additionally, one would have the potential problem of exchanges popping up that did not honor this. But those would not likely have enough liquidity to matter.

No, not at all. The first link mentions another possibility a grey area.

3) CNBC is suspected of transferring the information before the 2pm to chicago, but not releasing it to the outside world until 2pm. No faster than light speed needed. The rule was stated as disclose from the room to the public. Is a server in chicago public? No. Is it outside the room ? , yes. So my understanding is that CNBC might be in trouble, or might not if the rule was ambiguous enough.

The Insider in this case would have the information well before it was announced in DC. He has the trades all setup and ready to execute, and then set the timer to have it happen at exactly 2PM. He forgot about the speed of light delay however and accidentally outed himself. After a decade or so the FTC might slap him with a couple of thousand dollar fine or something to make sure he never abuses insider information to make a billion dollars in a millisecond again.

Is the Fed going to increase the rate? This is a question with two possible answers, yes and no. You get the answer in D.C. and mark a particle there. The entangled particle in Chicago would get the appropriate mark at the speed of light (or instantly?) where it is read and triggers a buy or sell appropriately.

And of course it doesn't have to involve breaking the speed of light. It has to do with the Fed failing to properly enforce a supposedly very complex information lockdown and the information likely being either leaked or pre-loaded on remote servers, resulting in (according to the article) over $600M in trades via high-speed computer trading in the few milliseconds after the information was released - and now the Fed is investigating.

It's both related to technology and possibly involving criminal activity (or at the very lease a failure in information security). Sounds like a relevant story to me...